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I’ve recently learned first hand that San Ramon Valley High School has a vibrant Environmental Engineering Program. We hired three young graduates from that program as summer interns to work in our showroom. I’m sad to say that they’ve left our nest and moved onto other pursuits: two off to college, one to culinary school. Another young intern was a freshman home from university for the summer.
I believe every local business should take the opportunity to mentor and learn from our youth. I hope these young men are able to learn and earn their way into rewarding careers. Based on our experiences, it seems the community and the schools are doing a good job of preparing our youth for such endeavors. Tax filing extension periods are expiring for tax year 2011. The good news is that tens of thousands of American taxpayers will pay less tax via IRS renewable energy and energy efficiency credits. The Personal Tax Credits (PTC) for homeowners and Investment Tax Credits (ITC) for business owners are in place through tax year 2016. These tax incentives pay a homeowner or business owner 30% of the net installation cost of a qualifying solar electric or solar water heating system. There is no upper limit to the PTC or ITC for solar projects. These tax incentives will reduce alternative minimum tax liabilities as well. Lesser energy credits are available for windows, doors, furnaces, fans, and other household and business equipment. Solar water heat, used to heat a swimming pool, does not qualify. For specific details on all available technologies that qualify, see www.irs.gov/form5695.
PGE also provides rebates for pool pump upgrades (single-speed pool pumps are so inefficient they are no longer legal to be installed if they are over ½ horsepower). A variable speed pool pump will pay for itself in energy savings in a couple of years. There are also other efficiency upgrade rebates for lighting, appliances, insulation, etc. Solar electric and solar thermal systems also qualify for PGE rebates. See pge.com/rebates.
In tax year 2010, the installation of a small solar electric system on my home reduced my annual tax liability by over $4,000 (and brought my electric bill to $0). In tax year 2011, the installation of a solar water heater system on my home reduced my tax liability by $2,000 (and brought my water heating costs to $12). I’m no longer subject to rising electric or natural gas rates. Tax credits and escalating energy costs accelerate investment payback time that averages 5-6 years. For payback calculations, monies that would have gone to PGE are redirected to pay for the solar system.“Payback” is achieved when the PGE savings have fully paid for the solar electric system. I’m investing my “monies not paid to PGE” as pre-tax savings into a 401K-retirement savings plan. Monies paid to PGE never provide a return on investment.
At this time of year, our business typically encounters an end of year “solar project rush” to complete projects before December 31st. Project completion prior to year’s-end 2012 allows customers to capture the 30% PTC or ITC when they file their 2012 taxes in April 2013. That’s good tax planning.
Corporate business owners have an added advantage in the tax code concerning the ITC. Corporate businesses must file estimated quarterly tax payments as income is generated. With the installation of a solar PV system, the ITC can reduce an estimated current year quarterly tax payment because the ITC is a credit for the tax year in which the solar project was placed in service. Of course, business owners can depreciate their assets. Investments in renewable energy equipment qualify for accelerated Federal five-year depreciation. As always, get qualified advice from a tax professional.
GoSimpleSolar is taking advantage of Federal tax incentives for our business at our solar showroom location in downtown Danville. Our small operational awning mounted solar electric system on the Railroad Avenue side of our business was built primarily as a demonstration solar system. This solar system enhances our customer’s experience. We can demo firsthand how solar and its technology works. Customers and curious visitors can also see our PGE meter spin backwards as the panels generate excess solar energy. The excess power from our business’ solar system and my home’s solar system is sent back to the utility grid to be consumed locally.
By Mark Becker, GoSimpleSolar
Mark Becker is the President of GoSimpleSolar , by Semper Fidelis Construction, a Danville based Solar Installation Firm. Mark can be reached at 925.915.9252. Come visit GoSimpleSolar’s new showroom at 114 West Prospect Ave. in Danville to see, touch, and discuss solar and energy efficiency products. For more details, see www.GoSimpleSolar.com or email Mark@GoSimpleSolar.com.